U.S. Ag Export Infrastructure Struggles to Keep Up With Competition

The future of U.S. ag exports may indeed sit in the heart of Los Angeles. Soybean producers from across the United States had an opportunity to see how the products they produce are put aboard ships destined for export markets throughout the Far East. These markets are largely served through the Port of Los Angeles which is the largest port in the United States and the Port of Long Beach, which is number two and sits adjacent to the L.A. port.

Hosted by the Soy Transportation Coalition (STC), the tour was designed to help producers see the challenges and issues faced by shippers as they move products in and out of the United States. (Watch AgWeb starting Monday, March 15, 2010, for more information on the developing infrastructure in Brazil and the Panama Canal during the Top Producer Frontier Tour.)

Those challenges are increasing for shippers and agriculture, as well, says Mike Steenhoek, the executive director of STC. The soybean industry has been among the brightest stars in a very positive picture for agricultural exports recently. While this is a positive, it's not time to rest when you consider growing competitions from around the world.

"The question is not whether we grow the best soybeans in the world, because we do. The question is not whether we have customers who want to purchase soybeans and the products derived from them, because we do as well. The question is whether we can get those products to our customers in a cost effective way and the answer to that question is increasingly no," says Steenhoek.

Ed Ulch, STC secretary treasurer and a farmer from Solon, Iowa, says the port tour is important for U.S. farmers because it enables agriculture producers from across the country to meet the needs of customers in the Far East.

"We have not kept up, we have not put that much money into infrastructure. We have other countries, in the Southern Hemisphere in particular, that are doing more than we are. We have to keep pace with that.

Ulch says the only exception that may exist to declining competitiveness for U.S. infrastructure in the U.S. is in the railroad sector.

Among the biggest customers for U.S. soybeans and other agricultural products is China. That country recently built a port in three years that is roughly the same size as the Port of Los Angeles and the Port of Long Beach combined. That port and the 20-mile bridge that leads to it were built in three years, showing the investment other countries are making.

Jim McClellan, Vice President of Transportation services for the Port of Los Angeles says there has been a steady expansion of agricultural products in the past 10 years, proving the growing importance of exports to the industry.

"I think the free trade agreement with South Korea, for example, will open up even larger markets in the future. We've seen a whole variety of products. We've seen a steady increase particularly in soybeans, but also in grains and we hope to see that increase."

He voiced his support or virtually any free trade agreement and said currently there are several ships going out under capacity, so the potential for growth is tremendous.